When you check your bank balance, you may see two different balances: the ledger balance and the available balance. Although it sounds like the available balance is the balance you should focus on, your ledger balance is actually your "real" balance as far as the bank is concerned. It doesn't include credits or debits that haven't posted to your account yet. Thus, you should pay more attention to the ledger balance when determining whether you have enough money to make a withdrawal.

Definition

Your ledger balance is your current bank balance, as opposed to your available balance. Your available balance includes credits or debits from transactions that have not yet posted to your account, such as deposits or withdrawals you made in the last 24 hours. Thus, it is safer to use your ledger balance than your available balance because if a transaction doesn't clear, your available balance may not be correct.

Withdrawals

When you withdraw money from the bank, it is listed as a debit on your account. The withdrawal impacts your available balance until such time as it posts to your account, at which point it is debited from your ledger balance. Thus, when you withdraw funds from the bank, you always withdraw them from your ledger balance. However, it may not seem like it when you check your statement immediately after making a withdrawal.

Overdrafts

If you withdraw more money from your account than is currently posted to the account, you may be charged an overdraft fee, even if a deposit posts to your account soon after you make the withdrawal. Overdraft fees are usually about $25 to $35 per item. Always use your ledger balance to determine whether you have enough money in your account before making a withdrawal. You won't have an overdraft fee if you keep your withdrawals within the limit of your ledger balance.

Consideration

Debits to your account can sometimes take several days to post. If you use your debit card to rent a vehicle or reserve a hotel, the reservations desk may put a pre-authorization on your account for far more than the actual amount you will ultimately pay. Thus, you might not be able to withdraw money to pay for other things until the pre-authorization clears, which can take several days.